There is a process observed in most societies of the world, where markets for goods and services emerge organically and are allowed to grow untaxed, until eventually their popularity makes them a beacon for governments looking to increase their revenue. Similarly, markets which grow too large often require the restrictions of law to discourage those who find ways to make the market work for them but to the detriment of society at large.
The latest emerging market – digital communication, has been left to grow and is now truly enormous. With an estimated three billion social media users, the potential revenue from a tax on social media usage is becoming a very attractive prospect.
Just recently, the Ugandan government had announced that they are planning to introduce a tax on social media usage and the telecommunications which are part and parcel of these platforms. While President Museveni insisted that the use of internet for educational and research purposes will remain free, he criticised the communications sector for ‘concealing’ money and promoting lugambo (gossip). This unprecedented tax plan has been widely criticised for its potential infringement on personal freedoms and the implications of taxing content. However, a revenue of between Sh400 billion ($108.55 million) and Sh1.4 trillion ($379.9 million) is a very convincing reason for the government to ignore criticism. Some Ugandans have welcomed the tax, saying that decreased social media usage will be beneficial for society and the extra government revenue will go towards projects which could benefit the unprivileged citizens.
Simultaneously, in the UK, a tax on social media is also being considered. However, in this case, government revenue is barely considered. The UK tax is not so much a serious consideration as it is a threat, attempting to force social media platforms into a more aggressive monitoring and removal policy towards hate speech, radicalising content and misinformation. As has been discussed in previous articles, the draw of social media in the modern world is its accessibility to people of all economic backgrounds. If that is taken away, user numbers will shrink and likely remain low. So, the UK government’s threat definitely strikes a nerve.
The situation in which social media companies and governments are finding themselves is very tricky. This is largely because social media is such a unique creation. It is difficult to tax something that is so intrinsic to the way people communicate without infringing on personal freedoms. But at the same time, without a financial incentive, social media companies have no reason to consider the greater social good. Social media is having unprecedented effects on the lives of ordinary people, and oftentimes those effects can be negative. The algorithms can result in a bubble-like world for users, where news and other content serve to further entrench existing beliefs or radicalise individuals. While it is admittedly not the social media companies’ job to keep society functional, it is the government’s job. So, everything returns to the needs for a financial incentive.
This limbo is interesting to observe. The battles over revenue and censorship are fought on precarious political grounds. Both sides of the conflict have high stakes. How will this play out? It is hard to tell. It is even likely that there will be a diverse range of solutions, as social media is used all over the world and different governments may tackle the challenges of taxing this market differently.
Whatever the outcome of the stand-off, these events do raise questions about the way future technology will integrate into legislation. As technology becomes more and more personal and intertwined in people’s lives, the process of incorporating it into a legal framework will become more difficult. Some may argue that social media can exist externally to the laws of a nation, but human nature has never encouraged societal good to prevail over social decay without a legal structure. A tax may not be a solution, but it is a start.